In this Communication the Commission assesses how and at what cost power can be generated from fossil fuels in future while reducing the associated greenhouse gas emissions.

ACT

Commission Communication of 10 January 2007 "Sustainable power generation from fossil fuels: aiming for near-zero emissions from coal after 2020" [COM(2006) 843 final - Not published in the Official Journal].

SUMMARY

The large-scale use of fossil fuels (oil, natural gas and coal) is the main cause of man-made climate change resulting from the CO2 emissions produced. The power generation sector accounts for a major proportion of these emissions and the upward trend is set to continue in future.

Over 50% of EU electricity comes from fossil fuels, mainly coal, which accounts for about 30% of overall electricity generation in the EU. To help secure the EU's energy supply, coal will continue to play a key role in the energy sources used. In 2005 CO2 emissions from coal-based electricity generation accounted for 70% of total CO2 emissions due to electricity generation in the EU, and 24% of CO2 emissions from all sectors taken together.

These energy sources, particularly coal, will also become more and more important in power generation in certain parts of the world over the coming decades (China and India in particular) as a result of the significant rise in demand for energy.

It is therefore essential for the EU to set up the right framework now for the development and distribution of sustainable coal technologies, and thus limit CO2 emissions from the use of coal for electricity generation.

The improvements already made in coal technologies (increase in energy efficiency and a reduction in acid rain and local atmospheric pollution due to SO2, NOx and particulate emissions) show that significant technological progress is possible, in particular by applying the principle of carbon capture and storage (CCS).

Technologies for the sustainable use of fossil fuels

Technologies for the sustainable use of coal will be based on an optimum combination of 'clean coal' technologies (improving yield and reducing atmospheric emissions) and CCS technologies. Continued development of these technologies and demonstrating their commercial viability will lead to their large-scale use.

To achieve this, a substantial increase in funding for research is required for the development of technological demonstration projects at both national and Community level. Routine cooperation between the industrial sector and the pubic authorities is called for, via a coordination and support structure based on the Zero Emission Fossil Fuel Power Plant Technology Platform launched in 2006. The Commission is also to study what other appropriate demonstration measures should be taken in the short term.

The best available technology will have to be used for modernising the EU's stock of coal-fired power plants, enabling CO2 emissions generated by them to be cut by 20% by 2020. The Commission will assess whether using the best available technology is effective and will consider proposing the adoption of legally binding instruments to promote it where necessary.

A framework for developing these technologies

The EU needs a regulatory and economic framework that rewards low-carbon technologies. It will have to ensure the long-term use of sustainable coal technologies to promote investment and the transition to such technologies.

The Commission therefore recommends:

assessing the potential risks involved in carbon capture and storage, a process which will involve public internet-based consultation;

proposing requirements for using these technologies, allowing the risks to be properly managed;

The Commission also thinks that new coal-fired power plants should be built with CCS systems by 2020 and that existing plants should be gradually retrofitted. Incentives could be provided (by adopting legally binding objectives and setting up EU storage sites, for example).

The EU will also continue its efforts at international level to conclude an agreement to limit the rise in the Earth's temperature to 2°C above pre-industrial levels. CCS will be one of the options to be used in this connection. The EU will support the amendment of some of the existing international agreements and conventions to reduce the barriers to CCS technologies (for example under the seabed).

Costs and benefits of sustainable fossil fuels technologies

The construction of new CCS-ready plants should not necessarily lead to additional costs, while the construction of plants for the industrial-scale demonstration of sustainable coal use will require substantial financial resources, as will the retrofitting of existing power plants after 2020.

CCS technologies are as yet too costly for large-scale use. However, technological improvements over the coming years and the side benefits of CCS should limit the rise in the cost of electricity from plants using these technologies to 10% of current levels by 2020 or even fully cancel them out. Also, the potential rise in the cost of electricity generated in coal-fired plants should not translate, at least not fully, into higher electricity prices for consumers.

The Commission thinks that any negative environmental effects of CCS will stem mainly from potential leakage. However, the International Panel on Climate Change (IPCC) concludes that the proportion of CO2 retained in well-selected and well-managed storage sites is very likely to exceed 99% over 100 years.

The sustainable use of fossil fuels, in particular CCS, will make it possible to eliminate up to 90% of the carbon emissions from fossil-fuel power plants, i.e. an overall reduction in CO2 emissions in the 27 EU Member States of 27 to 30% by 2030 compared to 2000. The use of appropriate technologies will also enable the atmospheric pollutants traditionally associated with coal combustion, including NOx and SO2, to be reduced, thus resulting in lower local environmental and health costs.

If the EU can display strong international leadership in the development of sustainable fossil fuel technologies, this will enable it to create jobs and export its technology, and will have a positive knock-on effect on third countries. To achieve this, there will need to be close cooperation, particularly at technological and trade level, with coal-using countries, including China, the United States, India and the developing countries.

Background

The Communication is part of the "energy package" published by the Commission in January 2007, which sets out a new European energy policy with quantified targets.

RELATED ACTS

Commission Communication of 10 January 2007 on an Energy Policy for Europe [COM(2007) 1 final - Not published in the Official Journal].

This Communication is the main feature of the package of measures presented by the Commission in January 2007 (the "energy package"). After reviewing the energy challenges facing Europe, in particular climate change and the EU's security of supply, the Commission details a number of actions relating, among other things, to the internal energy market, security of supply, energy efficiency, renewable energy sources, energy technologies and international energy policy.

Commission Communication of 10 January 2007 "Limiting Global Climate Change to 2 degrees Celsius - The way ahead for 2020 and beyond" [COM(2007) 2 final - Not published in the Official Journal].

In this Communication the Commission looks at the costs and benefits of tackling climate change and recommends a number of measures to limit global warming to 2° Celsius. Some of the measures apply to the European Union alone (binding greenhouse gas emission targets and the adoption of energy measures, among others) while others are international in outlook (in particular, negotiation of an international agreement).

Commission Green Paperof 8 March 2006 "A European Strategy for Sustainable, Competitive and Secure Energy" [COM(2006) 105 final - Not published in the Official Journal].

With this Green Paper the Commission maps out a genuine European energy policy to meet the numerous challenges in terms of supply and the impact on growth and the environment in Europe.